by Lydia Fearn, Head of DC at Redington
We hear this mantra quite a lot, not just in pensions, but across financial services – the client always comes first. But while it sounds simple, many companies simply don’t follow it closely enough – the everyday pressures of work and looming targets can make it all too easy to get blown off course. However, when it comes to financial security in retirement, it is essential that each and every decision has the interests of our members firmly in sight. Effective member outcomes will only be achieved when their desired outcomes are front and centre of mind.
But how do we achieve this? Successful implementation needs a strong and stable foundation built on regular and continuous governance, and frank and honest debate.
Let’s look first at continuous governance. At its core, this approach depends on having an inbuilt set of metrics to refer back to and which should hold true over time. Therefore, it is crucial that, on commencing any scheme governance, a clear set of principles, along with a mission statement, is laid out. These should answer not only what you’re looking to achieve for members but also exactly how this is going to be done and what success ultimately looks like. Having these in place should provide a reference point for all other activity and allow you to measure how well these objectives are being met.
Now, let’s focus on frank and honest debate. If we are to do our best by members, we need to be ready to replace things that might not be working as effectively as they could be and not be afraid to challenge when things may go astray. We must be honest with ourselves and look at the scheme from the point of view of the member. To achieve this, it can be beneficial to seek views from advisers as well as the member themselves!
Governing schemes can involve many man hours and poring over the same documents, wrangling with the same set of problems and going over the same issues. Unfortunately, with the best will in the world, this can also lead to unintended consequences including stagnation within the governance team. It is important therefore to be open to fresh points of view – focus on the areas that matter and remembering to put your members front and centre of mind.
Making effective use of these strategies is also a good way of demonstrating value for money, which is becoming an increasingly important check point for members. It should help you think about what is needed to further enhance your scheme or help members on their journey to retirement. By focusing on the end result, you can really add value and guide your members to an outcome that works for them.
It is practically impossible to implement the best ideas in the best way every time, such is the nature of scheme design. But systematically making use of governance and debate should enable you to focus on the ‘whys’ as well as the ‘whats’, giving a consistent platform on which to build a scheme that your members value and ultimately makes a difference to their financial futures.
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